5 What is the Current ACO Market? Rapid expansion across payers Over 25 million covered lives Widespread penetration Over 800 ACOs in the United States Commercial: 17.2 million Medicare: 8.3 million Medicaid: 2.9 million ACO service areas in all 50 states and the District of Columbia 5 Source: Health Affairs: Accountable Care Organizations in 2016: Private And Public-Sector Growth And Dispersion.

6 What Does an ACO Look Like in Medicaid? Medicaid ACO models vary greatly, but we generally see three models: Provider-driven Provider establishes collaborative networks and assumes accountability for cost of care MCO-driven MCOs retain financial risk but implement new payment model and partnerships with providers Regional/Community Partnership-driven Regional/community organizations form care teams with providers and receive payments 6

8 State Example: Minnesota In 2013, MN launched its Medicaid ACO program, Integrated Health Partnerships (IHPs) Key IHP program features include:» Provider-led with two tracks: (1) larger systems providing inpatient and outpatient care; and (2) smaller systems not integrated with a hospital» Shared savings payment arrangement, with upside/downside risk for larger systems and upside only for smaller systems» 21 IHPs oversee care for 465,000 enrollees, approximately 45% of MN Medicaid population Accomplishments: 8» Estimated savings of $156 million compared to trended targets, over first three years; IHPs received 85%+ of dollars at risk for quality

13 What Does the Evidence Tell Us? In general, lack of evidence on payment reform initiatives in Medicaid» Only 17 of 355 payment reform evaluations identified through Duke s Payment Reform Evidence Hub focused on Medicaid However, early evidence indicates that a variety of state VBP initiatives have been successful» Reported improvements in quality and cost performance in both Colorado and Oregon s Medicaid ACO models (McConnell et al, JAMA Internal Medicine, 2017)» 7 percent relative reduction in Oregon s CCO expenditures compared to Washington state, primarily attributable to reductions in inpatient use (McConnell et al, Health Affairs, 2017) 13» Tennessee reported aggregate savings of $6.2 million in 2015 for three episodes of care (perinatal, acute asthma exacerbation, and total joint replacement)

14 State interest in VBP continues to grow, with focus on Implementation of VBP through managed care contracting Integrating long-term services and supports, behavioral health, and social determinants into VBP Alignment with MACRA

15 Visit CHCS.org to Download practical resources to improve the quality and costeffectiveness of Medicaid services Learn about cutting-edge efforts to improve care for Medicaid s highestneed, highest-cost beneficiaries Subscribe to CHCS , blog and social media updates to learn about new programs and resources Follow us on 15

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